UPFRONT
ETF UPDATE NEWS BRIEFS Canadian ETFs pass the $200 billion AUM mark
Canada’s ETF space hit a new milestone in November when listed ETF assets officially exceeded $200 billion. According to National Bank Financial’s latest report on the sector, Canadian ETFs attracted $4.5 billion during the month, marking the largest monthly inflow for 2019 and one of the highest on record for a single month. Inflows were reported across all categories; no asset class or region lost assets. The report also noted 16 new ETF launches in November.
Horizons completes corporate class ETF restructure
Horizons ETFs has completed the reorganization of 29 of its ETFs. The new multi-class corporate fund structure, Horizons ETF Corp., was given the green light by unitholders in early November. The reorganization, which took effect after the close of business on November 27, includes Horizons ETFs’ BetaPro suite of ETFs, 25 funds with a uniqueto-Canada structure offering leveraged, inverse and inverse-leveraged exposure to 12 different indexes and asset classes.
TD Asset Management launches 10 new ETFs
TD Asset Management has bolstered its ETF suite with 10 new offerings, bringing its total number of ETF products to 22. Harnessing the firm’s investment management and research teams’ expertise in fixed income, asset allocation, real estate, and quantitative investing, the new ETFs include the TD Income Builder (TPAY), TD Active Global Real Estate Equity (TGRE), TD Q Global
12
Multi-Factor (TQGM), TD Canadian Long-Term Federal Bond (TCLB), TD US Long-Term Treasury Bond (TULB), TD Active US High-Yield Bond (TUHY), TD Active Global Income (TGFI), TD Q Canadian Dividend (TQCD), TD Q Global Dividend (TQGD) and TD Q US SmallMid-Cap Equity (TQSM).
IA Clarington Investments makes multiple ETF changes
IA Clarington Investments has made several changes to its ETF suite. The firm launched the IA Clarington Loomis Global Equity Opportunities Fund, which uses an unconstrained, high-conviction strategy that aims to identify high-quality companies with excellent prospects to drive attractive total returns. IA Clarington also added five third-party portfolio managers and mandates to its managed asset program and renamed the IA Clarington Managed Portfolios as iA Wealth Managed Portfolios. Finally, the firm launched an Active ETF Series for the IA Clarington Floating Rate Income Fund, IA Clarington Global Allocation Fund and IA Clarington Strategic Income Fund.
Vanguard lowers management fee on FTSE index ETF
Vanguard Investments Canada has lowered the management fee on one of its largest equity ETFs, the Vanguard FTSE Global All Cap ex Canada Index ETF (VXC), from 0.25% to 0.20%. Vanguard has also reduced the total cost of ownership for VXC by simplifying the structure to remove a second layer of taxation with a lower withholding rate. “This total fee reduction continues our trend of passing on cost savings to investors,” said Vanguard Canada head Kathy Bock.
Investment options for snowbirds With several ETFs designed to limit currency costs and tax exposure, BMO is targeting investors who spend time south of the border
Now that winter has come to Canada, flocks of snowbirds have begun migrating south or turning to their advisors, asking if they can afford it. As lovely as the life of a snowbird sounds, it comes with potential financial pitfalls. Erika Toth, director for Eastern Canada at BMO ETFs, spoke to WP about the tax risks that come with owning property and spending time south of the border. BMO is targeting these challenges with ETF solutions that offer a reduced currency conversion cost and limited US estate tax liability. Toth points to several BMO ETFs that trade in US dollars but are listed on Canadian exchanges, meaning clients aren’t exposed to huge US estate tax liabilities. The first is the BMO US High Dividend Covered Call ETF (ZWH), designed to serve high cash flow needs via a diversified basket of blue-chip US stocks with a proven track record. It currently yields 6.04% and is tax efficient; roughly half of the return is taxed as capital gains or ROC. It’s also low-cost with a management fee of 0.71%. Another option is the BMO Low Volatility US Equity ETF (ZLU), which Toth says “is for investors looking to stay in equities but afraid of downside risks.” It has performed well even in down markets – in the decline of May 2019, it grew by 0.14% and did so again in August 2019 by 0.04%.
www.wealthprofessional.ca
12-13_Update ETF-SUBBED.indd 12
15/01/2020 5:53:52 AM